With the passage of Obamacare’s third anniversary, I’ve been thinking about all the implications of the law and, frankly, I feel hustled. This is how every American should feel about Obamacare.
Since 1981, I have practiced medicine, treating uninsured patients in public hospitals. I have seen politicians overpromise and underfund health care programs while hustling taxpayers by promising “free money” and appealing to their human kindness. Too often, though, politicians don’t reveal the full cost or effects of their policies. To her credit, Nancy Pelosi was honest. She said we had to pass Obamacare to learn what was in it — and we are learning.
Obamacare will disappoint Americans who like their health insurance plan and thought they could keep it. A recent report demonstrated that premiums have increased by $3,000 since Obamacare was enacted. As Obamacare increases the price of health insurance, employers control costs by converting full-time employees to part-time workers in order to avoid the new mandate on coverage.
The primary employers in America, small businesses, will stay small in response to Obamacare. Since Obamacare regulations do not apply until a business has 50 or more employees, smaller businesses are not hiring the 50th employee or laying off to get to 49. Recently, the Department of Labor unveiled that last quarter, the United States lost 212,000 full-time jobs while adding 370,000 part-time jobs. This is not a good indicator for middle-class job growth.Once Obamacare is implemented, predictions are that 30 percent of businesses will drop insurance coverage and dump employees onto government-run insurance exchanges. According to the Kaiser Family Foundation, the typical employer plan currently covers 80 percent of costs, while the exchange plans will only cover 60 percent to 70 percent of costs. Currently, the employee who gets sick pays only an average of $2,770 before the employer’s insurance policy covers the additional costs. Under the new exchange plan, the employee would pay $6,050 and the family $12,000 before the policy pays anything. Obamacare supporters say that the rise in cost is not important because patients with chronic illness will pay less, but even this is not clear. USA Today reported that small businesses with healthier employees are now “self-insuring,” which exempts them from the Obamacare regulations. This would lower employers’ costs by 45 percent. That Obamacare forces struggling employers to self-insure means the businesses with older, sicker workers may see their premiums rise by 25 percent. This is contrary to the expectations set by advocates claiming that Obamacare will make health care cheaper or free.
I concede that there will be one group for whom health care may be free: individuals earning less than 138 percent of the federal poverty level, who can enroll in Medicaid and have no deductible and no co-pay. Reportedly Arkansas, Ohio and maybe Texas are working to strike deals with the administration to give these people private insurance. Although it is tempting for states to enroll the newly eligible into private health plans rather than onto Medicaid, these governors must be mindful of the cost. Congressional Budget Office estimates suggest that private plans may cost 50 percent more than the Medicaid expansion in Obamacare.
Let’s take a single woman named Sharon who is not on Medicaid. Sharon is 30 years old and earns $22,340. Her employer drops the company insurance to save money, therefore dumping her in the exchange. Sharon now pays a premium of $1,405 per year, even with the subsidy offered on the exchange. If she has an accident, she may have to pay $6,050 out of pocket. Sharon is also paying higher state and federal taxes on a variety of goods and services so that the government can provide her neighbor at 138 percent of the federal poverty level (about $15,000 in 2012) with free private health insurance with no deductible or co-pay.
Sharon suspects that her neighbor could earn more money, but he would rather work fewer hours or work for cash, or perhaps, live out of wedlock so that he and his girlfriend both qualify for the taxpayer-provided free insurance. As Sharon pays 25 percent of her pretax income for her health care along with higher taxes, she asks, “Why I am doing this?” When Sharon complains, she is told that she lacks compassion, that she is closed-minded, that she shouldn’t mind paying higher taxes or being forced into a more expensive policy because this is for the good of her neighbor. Sharon should complain; there is a better way.
Patients should have the power, not bureaucrats. Those patients with pre-existing conditions can have access to insurance, and those working will not have to lose full-time employment. Medicaid should give the states flexibility and per-beneficiary payments to foster innovation and provide a safety net without increasing government dependency.
Sharon is right; there is a better way.
Rep. Bill Cassidy, Louisiana Republican, is a practicing physician at a charity hospital in Baton Rouge, La. He is a member of the House Energy and Commerce health subcommittee.